internet security and cyber law

1. UNIT III
SECURITY ANALYSIS
Risk Management: Identifying and Assessing Risk, Assessing
and Controlling Risk
RISK MANAGEMENT
Definition:
The formal process of identifying and controlling the risks facing an
organization is called risk management. It is the probability of an undesired
event causing damage to an asset. There are three steps
1. Risk Identification.
2. Risk Assessment
3. Risk Control
Risk Identification: It is the process of examining and documenting the
security posture of an organization’s information technology and the risk it
faces.
Risk Assessment: It is the documentation of the results of risk
identification.
Risk Control: It is the process of applying controls to reduce the risks to an
organization’s data and information systems.
To keep up with the competition, organizations must design and create safe
environments in which business process and procedures can function.
These environments must maintain Confidentiality & Privacy and assure the
integrity of organizational data-objectives that are met through the
application of the principles of risk management
Components of Risk Management
Risk Management
Risk Identification
Risk Control
Risk Assessment
is the documented result of
the risk identification process
Selecting Strategy
Justifying Controls
Inventorying Assets
Classifying Assets
Identifying Threats &
Vulnerabilities
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2. An Overview of Risk Management
Over 2,400 years ago by Chinese General Sun Tzu said
“1.If you know the enemy & know yourself, you need not fear the result of a
hundred battles.
2. If you know yourself but not the enemy, for every victory gained you will also
suffer a defeat.
3. If you know neither the enemy nor yourself, you will succumb in every battle”
Know Yourself
•
•
Identify, Examine & Understand the information systems.
To protect assets, you must understand what they are? How they add value
to the organization, and to which vulnerabilities they are susceptible.
• The policies, Education and training programs, and technologies that
protect information must be carefully maintained and administered to
ensure that they are still effective.
Know the Enemy
•
Identifying, Examining
organization.
&
Understanding
the
threats
facing
the
The Roles of the Communities of Interest
• It is the responsibility of each community of interest to manage the risks
that organization encounters.
Information Security
• Understand the threats and attacks that introduce risk into the organization.
• Take a leadership role in addressing risk.
Management & Users
• Management must ensure that sufficient resource are allocated to the
information security & Information technology groups to meet the security
needs of the organization.
• Users work with the systems and the data and are therefore well positioned
to understand the value of the information assets.
Information Technology
• Must build secure systems and operate them safely.
Three communities of interest are also responsible for the following
• Evaluating the risk controls.
• Determining which control options are cost effective.
• Acquiring or installing the needed controls.
• Overseeing that the controls remain effective.
Important Risk Factors of information Security are
i. Understand the threats and attacks that introduce risk into the organization.
ii. Taking asset inventory.
2

3. iii.
Verify the threats and vulnerabilities that have been identified as dangerous
to the asset inventory, as well as the current controls and mitigation
strategies.
iv. Review the cost effectiveness of various risk control measures.
Risk Identification
• IT professionals to know their organization’s information assets through
identifying, classifying and prioritizing them.
• Assets are the targets of various threats and threat agents, and the goal is to
protect the assets from the threats.
• Once the organizational assets have been identified, a threat identification
process is undertaken.
• The circumstances and settings of each information asset are examined to
identify vulnerabilities.
• When vulnerabilities are found, controls are identified and assessed as to
their capability to limit possible losses in the eventuality of attack.
• The process of Risk Identification begins with the identification of the
organization’s information assets and an assessment of their value.
• The Components of this process are shown in figure
Asset Identification & Valuation
• Includes all the elements of an organization’s system, such as people,
procedures, data and information, software, hardware, and networking
elements.
• Then, you classify and categorize the assets, adding details.
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4. Components of Risk Identification
Categorization of IT Components
•
People include employees and nonemployees. There are two categories of
employees: those who hold trusted roles and have correspondingly greater
authority and accountability, and other staff who have assignments without
special privileges. Nonemployees include contractors and consultants,
members of other organizations with which the organization has a trust
relationship, and strangers.
• Procedures fall into two categories: IT and business standard procedures,
and IT and business sensitive procedures. The business sensitive procedures
4

5. are those that may assist a threat agent in crafting an attack against the
organization or that have some other content or feature that may introduce
risk to the organization.
• Data Components have been expanded to account for the management of
information in all stages: Transmission, Processing, and Storage.
• Software Components can be assigned to one of three categories:
Applications, Operating Systems, or security components. Software
Components that provide security controls may span the range of operating
systems and applications categories, but are differentiated by the fact that
they are the part of the information security control environment and must
be protected more thoroughly than other system components.
• Hardware is assigned to one of two categories: the usual systems devices
and their peripherals, and the devices that are part of information security
control systems. The latter must be protected more thoroughly than the
former.
People, Procedures,& Data Asset Identification
People
: Position name/number/ID: Supervisor; Security clearance level;
special skills.
Procedures : Description/intended purpose/relationship to software / hardware
and networking elements; storage location for update; storage location for
reference.
Data : Classification; owner; Creator; Manager; Size of data structure; data
structure used; online/offline/location/backup procedures employed.
Hardware, Software, and Network Asset Identification
Depends on the needs of the organization and its risk management efforts.
• Name: Should adopt naming standards that do not convey information to
potential system attackers.
• IP address: Useful for network devices & Servers. Many organizations
use the dynamic host control protocol (DHCP) within TCP/IP that reassigns
IP numbers to devices as needed, making the use of IP numbers as part of
the asset identification process problematic. IP address use in inventory is
usually limited to those devices that use static IP addresses.
• Media Access Control (MAC) address: Electronic serial numbers or
hardware addresses. All network interface hardware devices have a unique
number. The MAC address number is used by the network operating
system as a means to identify a specific network device. It is used by the
client’s network software to recognize traffic that it must process.
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6. •
Element Type: Document the function of each Element by listing its type.
For hardware, a list of possible element types, such as servers, desktops,
networking devices or test equipment.
• One server might be listed as
• Device class= S (Server)
• Device OS= W2K ( Windows 2000)
• Device Capacity = AS ( Advanced Server )
Serial Number: For hardware devices, the serial number can uniquely
identify a specific device.
Manufacturer Name: Record the manufacturer of the device or software
component. This can be useful when responding to incidents that involve these
devices or when certain manufacturers announce specific vulnerabilities.
Manufacturer’s Model No or Part No:
Record the model or part number
of the element. This record of exactly what the element is can be very useful in
later analysis of vulnerabilities, because some vulnerability instances only apply to
specific models of certain devices and software components.
Software Version, Update revision, or FCO number: Document the
specific software or firmware revision number and, for hardware devices, the
current field change order (FCO) number. An FCO is an authorization issued by
an organization for the repair, modification, or update of a piece of equipment.
Documenting the revision number and FCO is particularly important for
networking devices that function mainly through the software running on them.
For example, firewall devices often have three versions: an operating system (OS)
version, a software version, and a basic input/output system (BIOS) firmware
version.
Physical location: Note where this element is located physically (Hardware)
Logical Location: Note where this element can be found on the organization’s
network. The logical location is most useful for networking devices and indicates
the logical network where the device is connected.
Controlling Entity: Identify which organizational unit controls the element.
Automated Risk Management Tools
-Automated tools identify the system elements that make up the hardware,
software, & network components.
-Many organizations use automated asset inventory systems.
-The inventory listing is usually available in a data base.
- Once stored, the inventory listing must be kept current, often by means of a tool
that periodically refreshes the data.
Information Asset Classification- In addition to the categories, it is
advisable to add another dimension to represent the sensitivity & Security priority
of the data and the devices that store, transmit & process the data.
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7. • Eg: Kinds of classifications are confidential data, internal data and
public data.
Information Asset Valuation
- As each asset is assigned to its category, posing a number of questions
assists in developing the weighting criteria to be used for information
asset valuation or impact evaluation. Before beginning the inventory
process, the organization should determine which criteria can best be
used to establish the value of the information assets. Among the criteria
to be considered are:
• Which information Asset is the most critical to the success of the
organization.
• Which information asset generates the most revenue?
• Which information asset generates the most probability?
• Which Information asset would be the expensive to replace?
Sample Inventory Worksheet
Data Classification
1. Confidential
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8. 2. Internal
3. External
Confidential: Access to information with this classification is strictly on a needto-know basis or as required by the terms of a contract.
Internal: Used for all internal information that does not meet the criteria for the
confidential category and is to be viewed only by authorized contractors, and other
third parties.
External: All information that has been approved by management for public
release.
The military uses five level classifications
1. Unclassified data
2. Sensitive But Unclassified data (SBU)
3. Confidential data
4. Secret data
5. Top Secret data
Unclassified data: Information that can generally be distributed to the public
without any threat to U.S. National interests.
Sensitive But Unclassified data (SBU) : Any information of which the loss,
misuse, or unauthorized access to, or modification of might adversely affect U.S.
national interests, the conduct of Department of Defense(DoD) programs, or the
privacy of DoD personnel.
Confidential data: Any information or material the unauthorized disclosure of
which reasonably could be expected to cause damage to the national security.
Secret: Any information or material the unauthorized disclosure of which
reasonably could be cause serious damage to the national security.
Top Secret Data: Any information or material the unauthorized disclosure of
which reasonably could be expected to cause exceptionally grave damage to the
national security.
Organization may have
1. Research data
2. Personnel data
3. Customer data
4. General Internal Communications
Some organization may use
1. Public data
2. For office use only
3. Sensitive data
4. Classified data
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9. •
Public: Information for general public dissemination, such as an
advertisement or public release.
• For Official Use Only: Information that is not particularly sensitive, but
not for public release, such as internal communications.
• Sensitive: Information important to the business that could embarrass the
company or cause loss of market share if revealed.
• Classified: Information of the utmost secrecy to the organization,
disclosure of which could severely impact the well-being of the
organization.
Security Clearances
• The other side of the data classification scheme is the personnel security
clearance structure.
• Each user of data must be assigned a single authorization level that
indicates the level of classification he or she is authorized to view.
• Eg: Data entry clerk, development Programmer, Information
Security Analyst, or even CIO.
• Most organizations have a set of roles and the accompanying
security clearances associated with each role.
• Overriding an employee’s security clearance is the fundamental
principle of “need-to-know”.
Management of classified data
•
•
•
•
•
•
Includes its storage, distribution, portability, and destruction.
Military uses color coordinated cover sheets to protect classified
information from the casual observer.
Each classified document should contain the appropriate designation at the
top and bottom of each page.
A clean desk policy requires that employees secure all information in
appropriate storage containers at the end of each day.
When Information are no longer valuable, proper care should be taken to
destroy them by means of shredding, burning or transferring to a service
offering authorized document destruction.
Dumpster diving to retrieve information that could embarrass a
company or compromise information security.
Threat Identification
After identifying the information assets, the analysis phase moves
on to an examination of the threats facing the organization.
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10. Identify and Prioritize Threats and Threat Agents
Threats to Information Security
•
•
•
•
•
This examination is known as a threat assessment. You can address each
threat with a few basic questions, as follows:
Which threats present a danger to an organization’s assets in the given
environment?
Which threats represent the most danger to the organization’s information?
How much would it cost to recover from a successful attack?
Which of the threats would require the greatest expenditure to prevent?
Weighted Ranks of Threats to Information Security
Threat
Mean
Standard
Weight
Deviation
Deliberate software attacks
3.99
1.03
546
Forces of Nature
2.80
1.09
218
Acts of human error or failure
3.15
1.11
350
Deliberate acts of theft
3.07
1.30
226
Technological obsolescence
2.71
1.11
158
Technical software failures or
3.16
1.13
358
errors
Compromises to intellectual
2.72
1.21
181
10
Weighted
Rank
2178.3
610.9
1101.0
694.5
427.9
1129.9
494.8

11. property
Vulnerability Identification:
•
Create a list of Vulnerabilities for each information asset.
• Groups of people work iteratively in a series of sessions give best result.
• At the end of Identification process, you have a list of assets and their
vulnerabilities.
Vulnerability Assessment of a Hypothetical DMZ Router
Threat
Deliberate software attacks
Acts of human error or failure
Technical software failures or errors
Technical hardware failures or errors
Deviations in Quality of service
Deliberate acts of sabotage or
vandalism
Deliberate acts of theft
Technological obsolescence
Forces of nature
Compromises to intellectual property
Possible Vulnerabilities
Internet protocol is vulnerable to denial
of service.
Employees may cause outage if
configuration errors are made.
Vendor-supplied routing software could
fail and cause an outage.
Hardware can fail and cause an outage.
Power system failures are always
possible.
Internet protocol is vulnerable to denial
of service.
This information asset has little intrinsic
value, but other assets protected by this
device could be attacked if it is
compromised.
If this asset is not reviewed and
periodically updated, it may fall too far
behind its vendor support model to be
kept in service.
All information assets in the
organization are subject to forces of
nature, unless suitable controls are
provided.
This information asset has little intrinsic
value, but other assets protected by this
device could be attacked if it is
compromised.
Risk Assessment
• Assigns a risk rating or score to each Information asset.
• It is useful in gauging the relative risk to each Vulnerable asset.
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12. Valuation of Information assets
• Assign weighted scores for the value to the organization of each
Information asset.
• National Institute of Standards & Technology (NIST) gives some standards.
• To be effective, the values must be assigned by asking he following
questions.
• Which threats present a danger to an organization’s assets in the given
environment?
• Which threats represent the most danger to the organization’s Information?
• How much would it cost to recover from a successful attack?
• Which of the threats would require the greatest expenditure to prevent?
Likelihood
•
It is the probability of specific vulnerability within an organization will be
successfully attacked.
• NIST gives some standards.
• 0.1 = Low
1.0 = High
• Eg: Number of network attacks can be forecast based on how many
network address the organization has assigned.
Risk Determination
Risk = [ ( Likelihood of vulnerability occurrence ) X (Value of information
Asset )] __ ( % of risk mitigated by current controls) + uncertainty of current
knowledge of the Vulnerability
• For the purpose of relative risk assessment, risk equals:
– Likelihood of vulnerability occurrence TIMES value (or impact)
– MINUS percentage risk already controlled
– PLUS an element of uncertainty
Eg: Information Asset A has a value score of 50 & has one vulnerability:
Vulnerability 1 has a likelihood of 1.0 with no current controls, estimate that
assumptions and data are 90% accurate.
Solution:
Risk = [(1.0) x 50] – 0% + 10%
= (50 x 1.0) – ((50 x 1.0)x 0.0) + ( (50 x 1.0) x 0.1)
= 50 – 0 + 5
= 55
Identify Possible Controls ( For Residual Risk)
•
Residual risk is the risk that remains to the information asset even after the
existing control has been applied.
• Three general categories of controls
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13. 1. Policies
2. Programs
3. Technologies
1. Policies
• General Security Policy
• Program Security Policy
• Issue Specific Policy
• Systems Specific Policy
2. Programs
• Education
• Training
• Awareness
3. Security Technologies
• Technical Implementation Policies
Access Controls
• Specially addresses admission of a user into a trusted area of the
organization.
• Eg: Computer rooms, Power Rooms.
• Combination of policies , Programs, & Technologies
Types of Access controls
Mandatory Access Controls (MACs)
• Give users and data owners limited control over access to
information resources.
Nondiscretionary Controls
• Managed by a central authority in the organization; can be based on
individual’s role (role-based controls) or a specified set of assigned
tasks (task-based controls)
Discretionary Access Controls ( DAC)
• Implemented at discretion or option of the data user
Lattice-based Access Control
• Variation of MAC - users are assigned matrix of authorizations for
particular areas of access.
Documenting the Results of Risk Assessment
By the end of the Risk Assessment process, you probably have a collection of long
lists of information assets with data about each of them. The goal of this process is
to identify the information assets that have specific vulnerabilities and list them,
ranked according to those most needing protection. You should also have collected
some information about the controls that are already in place. The final
summarized document is the ranked vulnerability risk worksheet, a sample of
which is shown in the following table.
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14. Asset
Customer Service Request
via e-mail(inbound)
Asset Impact
or
Relative
value
55
Customer order via SSL (inbound)
100
Customer order via SSL (inbound)
100
Customer Service Request
via e-mail(inbound)
55
Customer Service Request
via e-mail(inbound)
55
Customer order via SSL (inbound)
100
Customer order via SSL (inbound)SSL-Secure
Sockets Layer
100
Vulnerability
E-mail disruption
due to hardware
failure
Lost orders due to
Web
server
hardware failure
Lost orders due to
Web server or ISP
service failure
E-mail disruption
due to SMTP mail
relay attack
E-mail disruption
due to ISP service
failure
Lost orders due to
Web server denialof-service attack
Lost orders due to
Web
server
software failure
Vulnerability
Likelihood
Risk Rating Factor
0.2
11
0.1
10
0.1
10
0.1
5.5
0.1
5.5
0.025
2.5
0.01
1
Risk Control Strategies
Four basic strategies to control each of the risks that result from these
vulnerabilities.
1. Apply safeguards that eliminate the remaining uncontrolled risks for the
vulnerability [Avoidance]
2. Transfer the risk to other areas (or) to outside entities[transference]
3. Reduce the impact should the vulnerability be exploited[Mitigation]
4. Understand the consequences and accept the risk without control or
mitigation[Acceptance]
Avoidance
It is the risk control strategy that attempts to prevent the exploitation of the
vulnerability, and is accomplished by means of
a) Countering threats
b) Removing Vulnerabilities in assets
c) Limiting access to assets
d) Adding protective safeguards.
Three common methods of risk avoidance are
1. Application of policy
2. Application of Training & Education
3. Application of Technology
Transference
• Transference is the control approach that attempts to shift the risk to other
assets, other processes, or other organizations.
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15. • It may be accomplished through rethinking how services are offered,
revising deployment models, outsourcing to other organizations, purchasing
Insurance, Implementing Service contracts with providers.
Top 10 Information Security mistakes made by individuals.
1. Passwords on Post-it-Notes
2. Leaving unattended computers on.
3. Opening e-mail attachments from strangers.
4. Poor Password etiquette
5. Laptops on the loose (unsecured laptops that are easily stolen)
6. Blabber mouths ( People who talk about passwords)
7. Plug & Play[Technology that enables hardware devices to be
installed and configured without the protection provided by people
who perform installations]
8. Unreported Security Violations
9. Always behind the times.
10. Not watching for dangers inside the organization
Mitigation
- It is the control approach that attempts to reduce the impact caused by the
exploitation of vulnerability through planning & preparation.
• Mitigation begins with the early detection that an attack is in
progress and the ability of the organization to respond quickly,
efficiently and effectively.
- Includes 3 types of plans.
1. Incident response plan (IRP) -Actions to take while incident is in
progress
2. Disaster recovery plan (DRP) - Most common mitigation procedure.
3. Business continuity plan (BCP) - Continuation of business activities
if catastrophic event occurs.
Incident Response Plan (IRP)
This IRP Plan provides answers to questions such as
1. What do I do now?
2. What should the administrator do first?
3. Whom should they contact?
4. What should they document?
The IRP Supplies answers.
For example, a system’s administrator may notice that someone is copying
information from the server without authorization, signaling violation of policy by
a potential hacker or an unauthorized employee.
The IRP also enables the organization to take coordinated action that is either
predefined and specific or ad hoc and reactive.
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16. Disaster Recovery Plan (DRP)
• Can include strategies to limit losses before and during the disaster.
• Include all preparations for the recovery process, strategies to limit losses
during the disaster, and detailed steps to follow when the smoke clears, the
dust settles, or the floodwater recede.
• DRP focuses more on preparations completed before and actions taken after
the incident, whereas the IRP focuses on intelligence gathering, information
analysis, coordinated decision making, and urgent, concrete actions.
Business Continuity Plan (BCP)
• BCP is the most strategic and long term of the three plans.
• It encompasses the continuation of business activities if a catastrophic event
occurs, such as the loss of an entire database, building or operations center.
• The BCP includes planning the steps necessary to ensure the continuation
of the organization when the scope or scale of a disaster exceeds the ability
of the DRP to restore operations.
• Many companies offer this service as a contingency against disastrous
events such as fires. Floods, earthquakes, and most natural disasters.
Acceptance
•
It is the choice to do nothing to protect a vulnerability and do accept the
outcome of its exploitation.
• This strategy occurs when the organization has:
• Determined the level of risk.
• Assessed the probability of attack.
• Estimated the potential damage that could occur from attacks.
• Performed a thorough cost benefit analysis.
• Evaluated controls using each appropriate type of feasibility.
• Decided that the particular function, service, information, or asset
did not justify the cost of protection.
Selecting a Risk Control Strategy
-Level of threat and value of asset play major role in selection of strategy
-Rules of thumb on strategy selection can be applied:
• When vulnerability (flaw or weakness) exists: Implement security controls
to reduce the likelihood of a vulnerability being exercised.
• When vulnerability can be exploited: Apply layered protections,
architectural designs, and administrative controls to minimize the risk.
• When the attacker’s cost is less than his potential gain: Apply protections to
increase the attacker’s cost.
• When potential loss is substantial: Apply design principles, architectural
designs, and technical and non-technical protections to limit the extent of
the attack, thereby reducing the potential for loss.
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17. Evaluation, Assessment & Maintenance of Risk Controls
•
Once a control strategy has been implemented, it should be monitored, &
measured on an ongoing basis to determine the effectiveness of the security
controls and the accuracy of the estimate of the Residual risk
• There is no exit from this cycle; it is a process that continues for as long as
the organization continues to function.
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18. Risk Control Cycle
Categories of Controls
•
Controlling risk through avoidance, Mitigation or Transference may be
accomplished by implementing controls or safeguards.
• Four ways to categorize controls have been identified.
–
Control function
• Preventive or detective
– Architectural layer
• One or more layers of technical architecture
– Strategy layer
• Avoidance, mitigation …
18

19. – Information security principle
Control Function
-
Safeguards designed to defend systems are either preventive or detective.
Preventive controls stop attempts to exploit a vulnerability by implementing
a security principle, such as authentication, or Confidentiality.
Preventive controls use a technical procedure, such as encryption, or some
combination of technical means and enforcement methods.
Detective controls – warn organizations of violations of security principles,
organizational policies, or attempts to exploit vulnerabilities.
Detective controls use techniques such as audit trails, intrusion detection
and configuration monitoring.
Architectural Layer
-
Controls apply to one or more layers of an organization’s technical
architecture.
The following entities are commonly regarded as distinct layers in an
organization’s Information architecture.
Organizational policy.
External Networks.
Extranets ( or demilitarized zones )
Intranets ( WANs and LANs )
Network devices that interface network zones.(Switches,
Routers, firewalls and hubs)
6. Systems [ Mainframe, Server, desktop]
7. Applications.
1.
2.
3.
4.
5.
Strategy Layer
Controls are sometimes classified by the risk control strategy they
operate within:
1. Avoidance
2. Mitigation
3. transference
Characteristics of Secure Information
1.
2.
3.
4.
5.
6.
7.
Confidentiality
Integrity
Availability
Authentication
Authorization
Accountability
Privacy
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20. Confidentiality: The control assures the confidentiality of data when it is stored,
processed, or transmitted. An example of this type of control is the use of Secure
Sockets Layer (SSL) encryption technology to secure Web content as it moves
from Web server to browser.
Integrity: The control assures that the information asset properly, completely, and
correctly receives, processes, stores, and retrieves data in a consistent and correct
manner .Ex: Use of parity or cyclical redundancy checks in data transmission
protocols.
Availability: The control assures ongoing access to critical information assets. Ex:
Deployment of a network operations center using a sophisticated network
monitoring toolset.
Authentication: The control assures that the entity (person or computer) accessing
information assets is in fact the stated entity. Ex: The use of cryptographic
certificates to establish SSL connections, or the use of cryptographic hardware
tokens such as SecurID cards as a second authentication of identity.
Authorization: The control assures that a user has been specifically and explicitly
authorized to access, update, or delete the contents of an information asset. Ex:
Use of access control lists and authorization groups in the Windows networking
environment. Another example is the use of a database authorization scheme to
verify the designated users for each function.
Accountability: The control assures that every activity undertaken can be
attributed to a specific named person or automated process. Ex: Use of audit logs
to track when each user logged in and logged out of each computer.
Privacy: The control assures that the procedures to access, update, or remove
personally identifiable information comply with the applicable laws and policies
for that kind of information.
Feasibility Studies
-
-
-
Before deciding on the strategy (Avoidance, transference, mitigation, or
acceptance), for a specific vulnerability, all the economic and noneconomic consequences of the vulnerability facing the information asset
must be explored.
Cost Avoidance- It is the process of avoiding the financial impact of an
incident by implementing a control.
Includes
1. Cost Benefit analysis
2. Organizational feasibility
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21. 3. Operational Feasibility
4. Technical Feasibility
5. Political feasibility.
Cost Benefit Analysis (CBA)
-
-
Organizations are urged to begin the cost benefit analysis by evaluating the
worth of the information assets to be protected and the loss in value if those
information assets were compromised by the exploitation of a specific
vulnerability.
The formal process to document this decision making process is called a
Cost Benefit analysis or an economic feasibility study.
Cost Benefit Analysis or an Economic Feasibility study
-
Some of the items that affect the cost of a control or safeguard include:
1. Cost of development or acquisition [purchase cost] of hardware,
software and services.
2. Training Fees(cost to train personnel)
3. Cost of Implementation[Cost to install, Configure, and test hardware,
software and services]
4. service Costs[Vendor fees for maintenance and upgrades]
5. Cost of maintenance[Labor expense to verify and continually test,
maintain and update]
Benefit is the value that an organization realizes by using controls to prevent
losses associated with a specific vulnerability.
Amount of benefit = Value of the Information asset and Value at risk.
Asset Valuation is the process of assigning financial value or worth to each
information asset.
Some of the components of asset valuation include:
1. Value retained from the cost of creating the information asset.
2. Value retained from past maintenance of the information asset.
3. Value implied by the cost of replacing the information.
4. Value from providing the information.
5. Value incurred from the cost of protecting the information.
6. Value to owners.
7. Value of intellectual property.
8. Value to adversaries.
9. Loss of Productivity while the information assets are unavoidable.
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22. 10. Loss of revenue while information assets are unavailable.
The organization must be able to place a dollar value on each collection of
information and the information assets it owns. This value is based on the answers
to these questions:
• How much did it cost to create or acquire this information?
• How much would it cost to recreate or recover this information?
• How much does it cost to maintain this information?
• How much is this information worth to the organization?
• How much is this information worth to the competition?
A Single loss expectancy (SLE) is the calculation of the value associated with
the most likely loss from an attack. It is a calculation based on the value of the
asset and the exposure factor (EF), which is the expected percentage of loss
that would occur from a particular attack, as follows:
Single Loss Expectancy (SLE) = Asset value x Exposure factor [EF]
EF  Expected percentage of loss that would occur from a particular attack.
The probability of threat occurring is usually a loosely derived table indicating the
probability of an attack from each threat type within a given time frame (for
example, once every 10 years). This value is commonly referred to as the
annualized rate of occurrence (ARO)
The expected value of a loss can be stated in the following equation:
Annualized loss Expectancy (ALE) which is calculated from the ARO and SLE.
ALE = SLE x ARO
Cost Benefit Analysis (CBA)Formula
CBA is whether or not the control alternative being evaluated is worth the associated cost
incurred to control the specific vulnerability. The CBA is most easily calculated using the
ALE from earlier assessments before the implementation of the proposed control, which
is known as ALE (prior). Subtract the revised ALE, estimated based on control being in
place, known as ALE (post). Complete the calculation by subtracting the annualized
cost of the safeguard (ACS).
CBA = ALE (Prior) - ALE (Post) - ACS
Where:
-ALE prior is the Annualized Loss Expectancy of the risk before the
implementation of the control.
-ALE post is the ALE examined after the control has been in place for a
period of time.
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23. -ACS is the Annual Cost of the Safeguard.
Bench Marking
•
•
•
•
•
An alternative approach to risk management
Process of seeking out and studying the practices used in other organizations that
produce results you would like to duplicate in your organization.
One of two measures typically used to compare practices:
– Metrics-based measures
– Process-based measures
Good for potential legal protection.
Metrics-based measures are comparisons based on numerical standards, such as:
1. Numbers of successful attacks.
2. Staff-hours spent on systems protection.
3. Dollars spent on protection.
4. Numbers of Security Personnel.
5. Estimated value in dollars of the information lost in successful attacks.
6. Loss in productivity hours associated with successful attacks.
The difference between an organization’s measures and those of others is often referred
to as a performance gap. The other measures commonly used in benchmarking are
process-based measures. Process-based measures are generally less focused on numbers
and more strategic than metrics-based-measures.
Due Care/Due Diligence
♦ When organizations adopt levels of security for a legal defense, they may need to
show that they have done what any prudent organization would do in similar
circumstances - this is referred to as a standard of due care
♦ Due diligence is the demonstration that the organization is diligent in ensuring
that the implemented standards continue to provide the required level of
protection
♦ Failure to support a standard of due care or due diligence can open an
organization to legal liability
Best Business Practices
♦ Security efforts that provide a superior level of protection of information are
referred to as best business practices
♦ Best security practices (BSPs) are security efforts that are among the best in the
industry
♦ When considering best practices for adoption in your organization, consider the
following:
– Does your organization resemble the identified target?
– Are the resources you can expend similar?
– Are you in a similar threat environment?
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24. Microsoft’s Ten Immutable Laws of Security
1. If a bad guy can persuade you to run his program on your computer, it’s not your
computer anymore
2. If a bad guy can alter the operating system on your computer, it’s not your
computer anymore
3. If a bad guy has unrestricted physical access to your computer, it’s not your
computer anymore
4. If you allow a bad guy to upload programs to your web site, it’s not your web site
anymore
5. Weak passwords trump strong security
6. A machine is only as secure as the administrator is trustworthy
7. Encrypted data is only as secure as the decryption key
8. An out of date virus scanner is only marginally better than no virus scanner at all
9. Absolute anonymity isn't practical, in real life or on the web
10. Technology is not a panacea
Problems
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The biggest problem with benchmarking in information security is that
organizations don’t talk to each other.
Another problem with benchmarking is that no two organizations are identical
A third problem is that best practices are a moving target.
One last issue to consider is that simply knowing what was going on a few years
ago, as in benchmarking, doesn’t necessarily tell us what.
Baselining
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•
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Baselining is the analysis of measures against established standards,
In information security, baselining is comparing security activities and events
against the organization’s future performance.
When baselining it is useful to have a guide to the overall process
Feasibility Studies and the Cost Benefit analysis
•
•
Before deciding on the strategy for a specific vulnerability all information about
the economic and non-economic consequences of the vulnerability facing the
information asset must be explored.
Fundamentally we are asking “What are the actual and perceived advantages of
implementing a control contrasted with the actual and perceived disadvantages of
implementing the control?”
Cost Benefit Analysis (CBA)
•
•
•
The most common approach for a project of information Security controls and
safeguards is the economic feasibility of implementation.
Begins by evaluating the worth of information assets are compromised.
It is only common sense that an organization should not spend more to protect an
asset than it is worth.
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25. •
The formal process to document this is called a cost benefit analysis or an
economic feasibility study.
CBA: Cost Factors
•
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Some of the items that the cost of a control or safeguard include:
Cost of Development or Acquisition
Training Fees
Cost of implementation.
Service Costs
Cost of Maintenance
CBA: Benefits
-
Benefit is the value that the organization recognizes by using controls to prevent
losses associated with a specific vulnerability.
This is usually determined by valuing the information asset or assets exposed by
the vulnerability and then determining how much of that value is at risk.
CBA: Asset Valuation
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Asset Valuation is the process of assigning financial value or worth to each
information asset.
The valuation of assets involves estimation of real and perceived costs associated
with the design, development, installation, maintenance, protection, recovery, and
defense against market loss and litigation.
These estimates are calculated for each set of information bearing systems or
information assets.
There are many components to asset valuation.
CBA: Loss Estimates
-
Once the worth of various assets is estimated examine the potential loss that could
occur from the exploitation of vulnerability or a threat occurrence.
This process results in the estimate of potential loss per risk.
The questions that must be asked here include:
• What damage could occur, and what financial impact would it have?
• What would it cost to recover from the attack, in addition to the costs above?
• What is the single loss expectancy for each risk?
Organizational Feasibility
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•
Organizational Feasibility examines how well the proposed information security
alternatives will contribute to the efficiency, effectiveness, and overall operation
of an organization.
Above and beyond the impact on the bottom line, the organization must determine
how the proposed alternatives contribute to the business objectives of the
organization.
Operational feasibility
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26. •
•
•
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Addresses user acceptance and support, management acceptance and support, and
the overall requirements of the organization’s stake holders.
Sometimes known as behavioral feasibility, because it measures the behavior of
users.
One of the fundamental principles of systems development is obtaining user buy
in on a project and one of the most common methods for obtaining user
acceptance and support is through user involvement obtained through three simple
steps:
Communicate
Educate
Involve
Technical Feasibility
•
•
The project team must also consider the technical feasibilities associated with the
design, implementation, and management of controls.
Examines whether or not the organization has or can acquire the technology
necessary to implement and support the control alternatives.
Political feasibility
•
•
•
For some organizations, the most significant feasibility evaluated may be political
Within Organizations, political feasibility defines what can and cannot occur
based on the consensus and relationships between the communities of interest.
The limits placed on an organization’s actions or a behavior by the information
security controls must fit within the realm of the possible before they can be
effectively implemented, and that realm includes the availability of staff
resources.
Risk Management Discussion Points
Not every organization has the collective will to manage each vulnerability through the
application of controls
• Depending on the willingness to assume risk, each organization must define its
risk appetite
• Risk appetite defines the quantity and nature of risk that organizations are willing
to accept as they evaluate the tradeoffs between perfect security and unlimited
accessibility
Residual Risk
•
•
When we have controlled any given vulnerability as much as we can, there is
often risk that has not been completely removed or has not been completely
shifted or planned for this remainder is called residual risk.
To express it another way, “Residual risk is a combined function of
1. A threat less the effect of some threat –reducing safeguards.
2. Vulnerability less the effect of some vulnerability- reducing safeguards.
3. an asset less the effect of some asset value-reducing safeguards “
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27. Documenting Results
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At minimum, each information asset-vulnerability pair should have a documented
control strategy that clearly identifies any residual risk remaining after the
proposed strategy has been executed.
Some organizations document the outcome of the control strategy for each
information asset-vulnerability pair as an action plan
This action plan includes concrete tasks, each with accountability assigned to an
organizational unit or to an individual
Recommended Practices in Controlling Risk
•
•
We must convince budget authorities to spend up to the value of the asset to
protect a particular asset from an identified threat
Each and every control or safeguard implemented will impact more than one
threat-asset pair
Qualitative Measures
•
•
•
•
The spectrum of steps described above was performed with real numbers or best
guess estimates of real numbers-this is known as a quantitative assessment.
However, an organization could determine that it couldn’t put specific numbers
on these values.
Fortunately, it is possible to repeat these steps using estimates based on a
qualitative assessment.
Instead of using specific numbers, ranges or levels of values can be developed
simplifying the process
Delphi Technique
•
One technique for accurately estimating scales and values is the Delphi
Technique.
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28. •
•
•
The Delphi Technique, named for the Oracle at Delphi, is a process whereby a
group of individuals rate or rank a set of information
The individual responses are compiled and then returned to the individuals for
another iteration
This process continues until the group is satisfied with the result.
Review Questions
1. What is Risk Management? Why is the identification of risks, by listing assets
and their vulnerabilities, so important to the risk management process?
2. According to Sun Tzu, what two key understandings must you achieve to be
successful in battle?
3. Mention the benefits of Risk Management.
4. State the roles involved in Risk Management.
5. What is Risk Management? State the methods of identifying and assessing risk
management?
6. What do you mean by Risk identification?
7. Discuss in detail the process of assessing and controlling risk management
issues.
8. Who is responsible for risk management in an organization? Which community
of interest usually takes the lead in information security risk management?
9. In risk management strategies, why must periodic review be a part of the
process?
10. What are vulnerabilities? How do you identify them?
11. What are the four strategies for controlling risk?
12. Write the important risk factors of information security.
13. Describe risk avoidance. Name three common methods of risk avoidance.
14. Describe risk transference. Describe how outsourcing can be used for risk
transference.
15. Describe risk mitigation. What three planning approaches are discussed in the
text as opportunities, to mitigate risk?
16. List any four Information Security Policies.
17. How do you categories the components of an information system? Explain.
18. What do you mean by access control? Describe the different types of access
control and risk control strategies.
19. How is an incident response plan different from a disaster recovery plan?
20. What is risk appetite? Explain why risk appetite varies from organization to
organization.
21. What is cost benefit analysis?
22. What is the definition of single loss expectancy? What is annual loss
expectancy?
23. What is residual risk?
24. Which is more important to the system components classification scheme: that
the asset identification list be comprehensive or mutually exclusive?
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